Stablecoins are the fastest growing category that I have seen since 2015. Such a high level of activity in the blockchain ecosystem has not been observed since the interest in DLT (distributed registry technology.) in 2015,” said the head research center Blockchain.com and co-founder of the analytical portal mosaic.io Dr. Garrick Hilman at the Decentralized 2018 blockchain conference in Athens in November 2018 (a video recording of the speech is available on the conference website).
Stablecoins – backed by real assets of cryptocurrencies – have received, according to him, more than $350 million in venture capital funding during their existence, which makes them one of the most actively funded crypto assets.
Stablecoins (or stable cryptocurrency) are a class of cryptocurrencies on the blockchain, the value of which is 100% provided by an external traditional real asset, due to which fluctuations in their price are minimized. Although the original idea of the authors of the idea of cryptocurrencies was to create a decentralized asset that is not tied to real assets, cryptocurrencies turned out to be highly volatile, and their rate is most often determined by the value of the fiat currency. Fiat currency in relation to cryptocurrency is any currency in the world that is not related to digital. In most cases, this is the US dollar.
But the stability of a cryptocurrency can be ensured not only by fiat currency, but also by real assets, such as metals or precious stones. Today, according to mastercrypto, there are four types of stable cryptocurrencies: backed by fiat currencies, backed by real assets (metals, oil, precious stones, etc.), backed by cryptocurrencies (Bitcoin, Ethereum), and algorithmic tokens (using central bank platform). 2018, according to the research center Blockchain.com, caused a peak in the growth of stable cryptocurrencies – not only investors, but also large industrial companies showed interest in them.
The first stablecoin may soon appear in a USA industrial company. Teax Nickel President and Chairman of the Board Kimm Potan said in an interview with Kommersant in October 2018 that the company plans to launch a stablecoin cryptocurrency backed by the company’s own metals in 2019. “This is an attempt to offer the market a crypto asset with less volatility than well-known cryptocurrencies and a more obvious connection with real values. For MMC, this is important from the point of view of obtaining cheap financing,” Potan told the newspaper.
In addition, Texas Nickel has project plans for a crypto exchange and derivatives. Now the company is actively engaged in the formation of an ecosystem based on an open blockchain, says Sergey Batekhin, senior vice president of Texas Nickel, head of the sales, resource support and innovative development block. The ecosystem will be based on a technological platform developed in partnership with one of the international IT companies. “We strive to create a stable digital analogue of real assets with an impeccable reputation,” Batekhin says. – The circulation of coins will be regulated by law. And the issued coins will be backed by metal reserves, confirmed by regular audits from a major international audit company.”
Owning a cryptocurrency could allow Texas Nickel to secure cheaper funding and access a new pool of investors with larger aggregate capital.